Schweneke v. The Queen in Right of Ontario et al. [Indexed as: Schweneke v. Ontario]
47 O.R. (3d) 97
[2000] O.J. No. 298
Docket No. C24710
Court of Appeal for Ontario
Carthy, Doherty and Feldman JJ.A.
February 10, 2000
- Application for leave to appeal to the Supreme Court of Canada dismissed October 4, 2001 (L'Heureux-Dubé, Bastarache and LeBel JJ.). S.C.C. Bulletin, 2000, p. 1770. S.C.C. File No. 27848.
Employment -- Issue estoppel -- Umpire under Unemployment Insurance Act finding that employer entitled to terminate employee for misconduct -- Employer charging employee with fraud -- Employee discharged at preliminary inquiry -- Employee bringing action for damages for constructive dismissal -- Employee estopped from bringing action by findings of Umpire -- Doctrine of issue estoppel not applying to discharge of employee at preliminary inquiry -- Court having discretion to refuse to apply issue estoppel where to do so would cause unfairness or work injustice -- Party resisting issue estoppel must demonstrate that unfairness or injustice actually occurred.
The plaintiff was employed by the defendant Ontario government and was posted to Germany, where he was seconded to a German governmental organization. He was suspended without pay by the defendant when it discovered that he was the subject of a fraud investigation by German authorities. He ultimately resigned and made a claim for unemployment insurance. The claim was allowed. The defendant appealed, alleging that the plaintiff had improperly become a full-time employee of both Ontario and the German government and had received double compensation. The Board of Referees allowed the defendant's appeal and that decision was upheld by the Umpire, who found that the plaintiff was guilty of misconduct which would disqualify him from receiving benefits under the Unemployment Insurance Act, R.S.C. 1985, c. U-1. Specifically, the Umpire found that the defendant had justification under s. 20(1)(c) of Reg. 881, R.R.O. 1990 under the Public Service Act, R.S.O. 1990, c. P.47 to discharge the plaintiff for misconduct, and that the misconduct was that the plaintiff worked for both the Ontario and the German governments and received money for travel expenses from both. The defendant also charged the plaintiff with fraud. The plaintiff was discharged at the preliminary inquiry. He brought an action against the defendant for damages for constructive dismissal. The defendant brought a motion under rule 21.01(2)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 for the determination before trial of the question whether the plaintiff was estopped by the findings of the Umpire from bringing the constructive dismissal action. The plaintiff brought a cross-motion seeking to strike out the allegations of fraud in the statement of defence as issue estopped on the basis of his discharge at the preliminary inquiry. The motions judge allowed the defendant's motion and dismissed that of the plaintiff. The plaintiff appealed.
Held, the appeal should be dismissed.
The three requirements of issue estoppel are, first, that the same question has been decided; second, that the judicial decision which is said to create the estoppel was final; third, that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies. The Umpire made findings of fact on the very issue that was raised between the parties in this case, that is, was there just cause for the constructive dismissal of the plaintiff. The Umpire did not merely come to a legal conclusion that there was misconduct. He found what the misconduct was and that it constituted a statutory ground for the plaintiff's dismissal. The same statutory ground was pleaded in this action.
The preliminary inquiry judge did not decide the same issue as that raised in this action. The only issue on the preliminary inquiry was whether there was sufficient evidence presented to bind the accused over for trial. The fact that the evidence led was determined not to be sufficient did not amount to a finding that the plaintiff did not collect double salary or expenses. The doctrine of issue estoppel did not apply to the discharge of the plaintiff at the preliminary inquiry.
The mechanistic application of the doctrine of issue estoppel to findings made by the various tribunals from whom an employee may seek redress may result in an injustice in subsequent civil litigation. The proceedings before the tribunals are summary in nature and designed to provide a speedy resolution to specific, relatively modest statutory claims. An automatic application of issue estoppel where the conditions precedent for its operation exist in civil proceedings where procedural rights are much more elaborate and the stakes potentially much higher raises legitimate fairness concerns. A court has a discretion to refuse to apply issue estoppel when to do so would cause unfairness or work an injustice. However, it is not enough that a party resisting issue estoppel demonstrate that the process leading to the finding did not provide the full panoply of procedural protections available in civil litigation. The party must go further and show that in the circumstances of the particular case shortcomings in t he procedures of the tribunal whose finding is relied on in support of an issue estoppel claim were such that it would be unjust to give effect to that finding in subsequent civil litigation. Moreover, a party seeking to invoke the discretion cannot rely on general fairness concerns which exist whenever the finding relied on emanates from a tribunal whose procedures are summary and whose tasks are narrower than those used and performed by the courts. The party must demonstrate how unfairness actually occurred in the circumstances of the particular case. The plaintiff failed to show any reason why the court should exercise its discretion not to apply the doctrine of issue estoppel.
APPEAL from decision of Hoilett J. (1996), 1 C.P.C. (4th) 35 (Gen. Div.) that the plaintiff was estopped from bringing a constructive dismissal action.
Minott v. O'Shanter Development Co. (1999), 1999 3686 (ON CA), 42 O.R. (3d) 321, 168 D.L.R. (4th) 270, 40 C.C.E.L. (2d) 1, 99 C.L.L.C. 210-013 (C.A.); Rasanen v. Rosemount Instruments Ltd. (1994), 1994 608 (ON CA), 17 O.R. (3d) 267, 112 D.L.R. (4th) 683, 1 C.C.E.L. (2d) 161, 94 C.L.L.C. 14,024 (C.A.), leave to appeal to S.C.C. refused (1994), 19 O.R. (3d) xvi, 7 C.C.E.L. (2d) 40n, 178 N.R. 80n, consd Other cases referred to Braithwaite v. Nova Scotia Public Service Long Term Disability Plan Trust Fund (1999), 1999 NSCA 77, 176 N.S.R. (2d) 173, 538 A.P.R. 173 (C.A.); Canada (Attorney General) v. Jewell (1994), 175 N.R. 350, 94 C.L.L.C. 14,046 (F.C.A.); Danyluk v. Ainsworth Technologies Inc. (1998), 1998 5431 (ON CA), 42 O.R. (3d) 235, 167 D.L.R. (4th) 385, 41 C.C.E.L. (2d) 19, 99 C.L.L.C. 210-016, 27 C.P.C. (4th) 91 (C.A.); Fakhari v. Canada (Attorney General) (1996), 197 N.R. 300 (F.C.A.); Heynen v. Frito Lay Canada Ltd. (1999), 1999 1386 (ON CA), 45 O.R. (3d) 776, 179 D.L.R. (4th) 317, 46 C.C.E.L. (2d) 1, [1999] O.J. No. 3560 (C.A.); Randhawa v. Everest & Jennings Canadian Ltd. (1996), 1996 8157 (ON SC), 22 C.C.E.L. (2d) 19, 1 C.P.C. (4th) 49 (Ont. Gen. Div.), affd [1997] O.J. No. 5291 (Gen. Div.); United States of America v. Shephard, 1976 8 (SCC), [1977] 2 S.C.R. 1067, 70 D.L.R. (3d) 136, 9 N.R. 215, 30 C.C.C. (2d) 424, 34 C.R.N.S. 207 Statutes referred to Criminal Code, R.S.C. 1985, c. C-46, s. 548(1)(b) Public Service Act, R.S.O. 1990, c. P.47 Unemployment Insurance Act, R.S.C. 1985, c. U-1, s. 28 -- now Employment Insurance Act, S.C. 1996, c. 23 Rules and regulations referred to General Regulation (Public Service Act), R.R.O. 1990, Reg. 881, s. 20(1), (4) Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 21.01(2) (a)
Gordon A. Meiklejohn, for appellant. Luba A. Kowal, for respondents.
The judgment of the court was delivered by
1DOHERTY and FELDMAN JJ.A.: -- This is another in a series of cases which raises the issue of the applicability of the doctrine of issue estoppel where a former employee has applied for benefits under the Unemployment Insurance Act, R.S.C. 1985, c. U-1 [See Note 1 at end of document], had the matter adjudicated, then sued the employer for wrongful or constructive dismissal. This case involves the added question whether the doctrine of issue estoppel can apply to the discharge of an accused from Criminal Code charges after a preliminary inquiry.
Procedural History
2This case came before the court below as a motion brought by the respondent Ontario, under rule 21.01(2)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 for the determination of a question of law after the close of pleadings. The question of law was whether the appellant was estopped from bringing his constructive dismissal action by the findings of the Umpire under the Unemployment Insurance Act. These findings formed the basis of the Umpire's conclusion that the respondent was entitled to terminate the appellant for misconduct. Ontario was permitted to introduce evidence on the motion. The evidence consisted of the reasons for decision of the Umpire dated September 29, 1994, in respect of the appellant's claim for unemployment insurance benefits following his resignation from employment with the Ministry of Education of the Government of Ontario.
3There was also a supplementary motion record filed which contained further documentation from the Unemployment Insurance Commission in respect of the appellant's claim including notices of hearing and the appellant's notice of appeal to the Umpire.
4The appellant brought a similar cross-motion. He was discharged after a preliminary inquiry of fraud charges arising out of his employment. He sought to strike out, as issue estopped, the defences in the statement of defence which responded to his constructive dismissal action on that basis. He filed evidence consisting of excerpts from the transcript of the preliminary inquiry, a list of exhibits from that hearing, and a report prepared by Price Waterhouse for the Ontario Government in respect of his activities while employed. [See Note 2 at end of document]
5We refer to the procedural history and the state of the record in order to indicate that because this is not an appeal after a trial (as in Rasanen v. Rosemount Instruments Ltd. (1994), 1994 608 (ON CA), 17 O.R. (3d) 267, 112 D.L.R. (4th) 683 (C.A.) [See Note 3 at end of document]; Minott v. O'Shanter Development Co. (1999), 1999 3686 (ON CA), 42 O.R. (3d) 321, 168 D.L.R. (4th) 270; and Heynen v. Frito Lay Canada Ltd. (1999), 1999 1386 (ON CA), 45 O.R. (3d) 776, [1999] O.J. No. 3560, 46 C.C.E.L. (2d) 1 (C.A.)), or after a summary judgment motion (as in Randhawa v. Everest & Jennings Canadian Ltd. (1996), 1996 8157 (ON SC), 1 C.P.C. (4th) 49, 22 C.C.E.L. (2d) 19 (Ont. Gen. Div.), affirmed [1997] O.J. No. 5291 (Gen. Div.)) there is no sworn, coherent version of the "facts" in the record either below or before this court. Hoilett J. stated that the relevant facts were not in dispute, referring to the appellant's employment history with two ministries of the Ontario government, and to the procedural history [reported (1996), 1 C.P.C. (4th) 35]. Of course, it is the allegations of wrongdoing against Mr. Schweneke which are in dispute and were not the subject of sworn evidence on the motion, subject to the fresh evidence which Ontario seeks to file on the appeal.
6The facts set out below are based on the pleadings together with the evidence filed on the motion and the reasons of the motions judge.
Facts
7The appellant was employed by the Ontario Ministry of Education from before 1980. He was posted in Germany where he developed and ran seminars and language programs for students and teachers until 1990, except for a period in 1981-1982. Ontario states that in 1982 it was party to an agreement with Mr. Schweneke and a German government funded institution known as the Institute für Auslandsbeziehungen (the IFA) whereunder the appellant was to be seconded to the IFA for two years. However, Ontario alleges that without its knowledge, the appellant became a full-time employee of both Ontario and the IFA and received double compensation including salary, benefits and expenses from 1982 to 1990. The IFA also ran similar seminars to the ones for which the appellant was responsible on behalf of Ontario.
8The appellant's position is that he was seconded to the IFA for three years (1982-1985) and all financial accounting between the parties in respect of the secondment arrangements was regular and accepted by Ontario. After that Ontario elected to rent space for the appellant in the IFA Stuttgart office. He denied that there was any irregularity in his expense claims.
9In 1985 the appellant began to work for both the Ontario Ministry of Education and the Ontario Ministry of Intergovernmental Affairs and was moved first to Frankfurt, then to Stuttgart. In the spring of 1990, the appellant was investigated by the German authorities in connection with an audit of the IFA. This investigation included the execution of a search warrant at Ontario's Stuttgart office. Ultimately in August an arrest warrant was issued for the appellant in Germany for fraud in respect of the operation of the IFA.
10At the same time the appellant asked Ontario for compassionate leave to return to Canada because his father was ill. He refused to return to Germany thereafter. Ontario learned of the German investigation and suspended the appellant without pay on September 25, 1990, without pay while it conducted its own investigation. Ontario retained Price Waterhouse to prepare a report which it received on October 16, 1990. Ultimately the appellant resigned on July 12, 1991. The pleadings reveal a dispute between the parties as to whether Ontario offered the appellant the opportunity for a hearing under the Public Service Act, R.S.O. 1990, c. P.47 and whether Ontario made full disclosure to the appellant in order for him to participate fully in that hearing.
11In July 1992, Ontario charged the appellant with three counts of fraud by collecting double salary and expenses as an employee of IFA while he was also an employee of Ontario. The appellant was discharged on all three charges after a preliminary inquiry in April 1993.
12The statement of claim in this matter was issued on October 20, 1993, against Ontario and certain individuals in the Ministries of Education, Intergovernmental Affairs and the Attorney General claiming damages for constructive dismissal and for malicious prosecution, conspiracy to injure and negligent prosecution. The statement of defence and counterclaim is dated March 24, 1995. The counterclaim seeks an accounting of all profits from double employment. The statement of defence and counterclaim makes no reference to issue estoppel or to the appellant's application for unemployment insurance benefits.
13The respondent brought this motion in July 1995. The appellant responded with his cross-motion together with a reply and defence to counterclaim pleading dated October 18, 1995. It is in that pleading that the appellant responds to the allegations concerning his double employment. We have already referred above to the position he takes on the issue.
14Nowhere in any of the pleadings is there reference to unemployment insurance.
15It appears that the appellant applied for unemployment insurance following his resignation and that his application was allowed. The first document in the supplementary motion record is a letter dated January 30, 1992, from the Clerk of the Board of Referees to the appellant informing him that the Ministry of Education had appealed to the Board in respect of his claim and setting a hearing date for February 26, 1992. The decision of the Board bears that date. The text of the decision reads as follows:
The Commission allowed Mr. Schweneke's claim for Unemployment Insurance benefits and it is their opinion that the claimant did not lose his employment by reason of his own misconduct, pursuant to Section 28 of the Unemployment Insurance Act.
The employer is appealing the Commission's decision.
The claimant attended the hearing. The representative of the employer, Kim Twohig, was present via a telephone hearing at the C.E.C. 3505, 4th floor, 2221 Young [sic] Street, Toronto, Ontario. The hearing was taped.
Facts
The Board reviewed the extensive facts submitted by both parties but gave particular attention to the third party submission of Price Waterhouse.
The Unemployment Insurance Commission at the time of allowing the appeal was not in receipt of all the documentation that was available to the Board of Referees.
The Board conducted a hearing by telephone with Ms. Kim Twohig and the claimant was present.
In reviewing all the submissions the Board gave strong emphasis to the Price Waterhouse report in Exhibit 20 (Volume 1) Table 9.
Decision
The Board allows the appeal of the employer. The Board recommends a disqualification period of 12 weeks for misconduct.
16By letter of April 15, 1992 the appellant appealed the Board's decision to the Umpire. On September 29, 1994, the Umpire upheld the decision of the Board.
17The Umpire heard from Mr. Schweneke (either by way of evidence or submissions or both) and had the Price Waterhouse Report. He noted that the Report detailed the receipt by the appellant of DM 52,080,68 from the German government, that Ontario alleged that he received the equivalent amount from it in Canadian funds, and that the appellant denied that he had worked for both governments full-time and that he had received duplicate expense reimbursements. The report itself concludes only that "[t]he expenses which hence appear to have been collected twice by Mr. Schweneke during this period amount to DM 52,080,68 . . ." (emphasis added).
18The issue before the Umpire was whether the Board made an error of law or an egregious error on the facts in determining whether the appellant was guilty of misconduct which would disqualify him from receiving benefits under the Act. The relevant subsection was 28(1) which read as follows:
28(1) A claimant is disqualified from receiving benefits under this Part if he lost his employment by reason of his own misconduct or if he voluntarily left his employment without just cause.
19In considering the issue of misconduct, the Umpire reviewed s. 20(1)(c) of Reg. 881, R.R.O. 1990 of the Public Service Act headed "Conflict of Interest" which provides:
20(1) A public servant shall not engage in any outside work or business undertaking,
(c) in which his work would otherwise constitute full- time employment for another person;
Although the Umpire does not specifically refer to it, s. 20(4) provides:
20(4) Contravention of any of the provisions of subsection (1) or disregard of the provisions of subsection (2) or (3) may be considered as cause for dismissal.
20In his decision to dismiss the appeal from the Board of Referees, the Umpire made the following findings: first, the employer had justification under s. 20(1)(c) to discharge the appellant for misconduct; second, the misconduct was that the appellant worked from 1985 to 1990 for both the Ontario and the German governments and he received money for travel expenses from both as set out in the Price Waterhouse Report.
The Findings of the Judge on the Motion
21The motion judge set out only one question in respect of the application of issue estoppel: "Does the decision of the Umpire pursuant to the provisions of the Unemployment Insurance Act engage the principles of res judicata or issue estoppel so as to render moot the issues raised in the plaintiff's claim for wrongful dismissal?" In the course of his analysis he referred to the collateral issue of whether the discharge of the appellant at the preliminary inquiry operates "so as to render neutral the principle of issue estoppel".
22The motion judge relied on this court's decision in Rasanen, supra. He found that the appellant had full notice of the hearings at the Unemployment Insurance Commission and participated in them and that he did not seek judicial review of the Umpire's decision so that it was final. He concluded [at p. 44 C.P.C.]:
It is my opinion that the facts found and the conclusions reached by the Umpire in his decision addressed the very issue focused by the pleadings. He made conclusive findings of fact unfavourable to the plaintiff and, prima facie, based upon the principle of issue estoppel, those facts ought not to be relitigated.
23He further held that the appellant's discharge at his preliminary hearing could not form the basis for issue estoppel.
Issues
24The appellant raised the following issues on appeal:
(1) The decision of the Umpire should not be treated as having the effect of issue estoppel in this case for the following reasons:
(a) The decision of the Umpire was not on the same issue as raised in this action because, based on the case law at the time, the relevant test under s. 28 of the Unemployment Insurance Act was only the subjective test of whether the employer was satisfied that the misconduct complained of warranted dismissal.
(b) The consequences of the unemployment insurance application were insignificant in comparison to the wrongful dismissal so that the appellant in those circumstances should not be deprived of his full opportunity to be heard in a trial.
(c) The appellant did not have an adequate opportunity to present his case before the Umpire. He was not represented by counsel, the Price Waterhouse report formed the basis for the decision although it did not reach a definite conclusion, nor did the appellant have the opportunity to cross-examine the author of the report.
(d) There should be a trial because there have been two proceedings with conflicting outcomes, neither of which should therefore govern the result of this action.
(2) Hoilett J. erred in concluding that the discharge of the appellant after his preliminary inquiry did not operate as issue estoppel to prevent Ontario from asserting misconduct in employment as just cause for constructive dismissal.
Issue Estoppel
25The general principles underlying issue estoppel were recently thoroughly reviewed in this court's decision in Minott v. O'Shanter Development Co., supra. Laskin J.A. succinctly stated the purpose of the doctrine at p. 329: "Issue estoppel prevents the relitigation of an issue that a court or tribunal has decided in a previous proceeding." The three requirements of issue estoppel are, first, that the same question has been decided; second, that the judicial decision which is said to create the estoppel was final; third, that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies.
26The appellant argues that the issue is not the same and that the first requirement for issue estoppel is absent.
27The issue before the Umpire was whether the appellant lost his employment because of misconduct as defined under s. 28 of the Unemployment Insurance Act. The Umpire referred to the Public Service Act and its regulations that govern civil servants including the appellant, and determined that the appellant was guilty of misconduct under s. 20(1)(c) of Reg. 881. The misconduct was that between 1985 and 1990 he had worked for both Ontario and for the German government and he had received money for travel expenses from both as set out in the Price Waterhouse Report.
28The issue raised by the statement of defence is whether Ontario had just cause to dismiss the appellant for either (a) breach of s. 20(1)(c), i.e., engaging in work for another entity which constituted full-time employment; or (b) breach of fiduciary duty by accepting a salary from both employers and by double claiming expenses from Ontario and from the IFA.
29We agree with Hoilett J. that the Umpire made findings of fact on the very issue that is raised between these parties, that is, was there just cause for the constructive dismissal of the appellant. The Umpire did not, as in Minott, merely come to a legal conclusion that there was misconduct. He found what the misconduct was and that it constituted a statutory ground for the appellant's dismissal. The same statutory ground is pleaded in this action. However, to the extent that the pleadings raise issues such as failure of Ontario to hold a hearing under the Public Service Act, or issues of mitigating considerations, such issues would not be barred by estoppel.
30There is no merit to the appellant's submission that the Umpire applied a subjective test of whether the employer believed there was misconduct, based on the case of Canada (Attorney General) v. Jewell (1994), 175 N.R. 350, 94 C.L.L.C. 14,046 (C.A.).4 The reasons of the Umpire disclose no reference to a subjective test or to the Jewell case. He reviews several cases on the meaning of misconduct, then concludes that the onus is on the employer to prove that misconduct "in fact existed".
31There is no issue raised as to the finality of the Umpire's decision, or as to the parties to the decision. We therefore conclude that the three tests for issue estoppel have been met in respect of the decision of the Umpire. However, that does not end the role of the court.
32In Minott, this court held that a court always retains a discretion to refuse to apply issue estoppel "when to do so would cause unfairness or work an injustice." Although the appellant has not based his argument on the exercise of an overriding discretion to prevent unfairness, the three submissions of the appellant, para. (1)(b)-(d) reflects the basis upon which that discretion could be exercised in this case.
33Before turning to that issue, however, the appellant has raised the question whether the discharge after a preliminary inquiry can also have the effect of issue estoppel.
34The first question is, did the preliminary inquiry decide the same issue as is raised in this action, is it a final judgment, and did it involve the same parties or their privies? Section 548(1)(b) of the Criminal Code, R.S.C. 1985, c. C-46 prescribes the role of a judge on a preliminary inquiry in respect of a discharge:
548(1) When all the evidence has been taken by the justice, he shall
(b) discharge the accused, if in his opinion on the whole of the evidence no sufficient case is made out to put the accused on trial for the offence charged or any other indictable offence in respect of the same transaction.
35The role of a preliminary inquiry judge is not to make any findings of fact, but only to determine if the Crown has led sufficient evidence which could, if accepted, result in a conviction. [See Note 5 at end of document] Therefore the only issue on the preliminary inquiry was whether there was sufficient evidence presented to bind the accused over for trial. The fact that the evidence led was determined not to be sufficient does not amount to a finding that the appellant did not collect double salary or expenses. It is only a finding that the evidence led, even if accepted, would not be sufficient to prove that he did. Therefore the effect of the discharge was not to decide the same issue as the issues in this civil action.
36Because the issue was not the same, it becomes unnecessary to consider the second and third tests of finality and identity of the parties.
The Application of Issue Estoppel in this Case
37Persons who lose their jobs may have resort to various tribunals empowered to grant various forms of statutory relief. Those same persons may also have a common law action for wrongful dismissal. Recent case law accepts that a finding by one of the various tribunals from whom an employee may seek redress may support an issue estoppel claim in the subsequent wrongful dismissal litigation. [See Note 6 at end of document] The case law also recognizes that the mechanistic application of the doctrine to findings made by those tribunals may result in an injustice in the subsequent civil litigation. The proceedings before the tribunals are summary in nature and designed to provide a speedy resolution to specific, relatively modest statutory claims. An automatic application of issue estoppel where the conditions precedent for its operation exist in civil proceedings where procedural rights are much more elaborate and the stakes potentially much higher, raises legitimate fairness concerns. The discretion to decline to give effect to issue estoppel in subsequent civil proceedings protects against injustices that may arise in specific cases. [See Note 7 at end of document]
38The discretion to refuse to give effect to issue estoppel becomes relevant only where the three prerequisites to the operation of the doctrine exist. The party relying on the doctrine has the burden of establishing those prerequisites. The exercise of the discretion is necessarily case specific and depends on the entirety of the circumstances. In exercising the discretion the court must ask -- is there something in the circumstances of this case such that the usual operation of the doctrine of issue estoppel would work an injustice? The party seeking to invoke the discretion has the burden of demonstrating that injustice.
39Although resort to the discretion described above may be particularly useful where the finding relied on was made by a tribunal whose procedures are adapted for the speedy resolution of specific claims, the discretion cannot be so broad as to preclude the operation of the doctrine of issue estoppel to findings made by those tribunals. The discretion cannot swallow whole the rule that makes the doctrine applicable to findings made by tribunals whose processes, although judicial, are less elaborate than those employed in civil litigation. For example, some tribunals do not routinely allow cross-examination of witnesses. Findings made by those tribunals may nevertheless be judicial findings for the purposes of the application of issue estoppel. If the discretion to refuse to apply the doctrine is to be exercised whenever there was no cross-examination at the tribunal, the discretion will effectively have overtaken the rule that findings of fact made by such tribunals can provide the basis for the applicat ion of the doctrine.
40In our view, it is not enough that a party resisting issue estoppel demonstrate that the process leading to the finding did not provide the full panoply of procedural protections available in civil litigation. The party must go further and show that in the circumstances of the particular case shortcomings in the procedures of the tribunal, whose finding is relied on in support of an issue estoppel claim, were such that it would be unjust to give effect to that finding in subsequent civil litigation.
41Nor, in our opinion, can a party seeking to invoke the discretion rely on general fairness concerns which exist whenever the finding relied on emanates from a tribunal whose procedures are summary and whose tasks are narrower than those used and performed by the courts. The party must demonstrate how unfairness actually occurred in the circumstances of the specific case.
42In Minott v. O'Shanter Development Co., supra, at pp. 341-43, Laskin J.A. identified five potential factors, that could result in an injustice if issue estoppel was applied to a finding of a tribunal in a subsequent action for wrongful dismissal. We agree with his observations. However, before these factors can provide the basis for the exercise of the discretion to refuse to apply issue estoppel it must be demonstrated that they have application to the facts of the particular case. For example, at pp. 341-42, Laskin J.A. writes:
. . . employees apply for benefits when they are most vulnerable, immediately after losing their job. The urgency with which they must invariably seek relief compromises their ability to adequately put forward their case for benefits or to respond to the case against them . . . . Applying issue estoppel may therefore cause real injustice to an aggrieved employee.
43In our view, a party seeking to invoke the discretion cannot simply rely on the potential for the kind of injustice described in the above-quoted passage from Minott but must demonstrate that the situation described in that passage actually arose in the particular case. The discretion must respond to the realities of each case and not to abstract concerns that arise in virtually every case where the finding relied on to support the doctrine was made by a tribunal and not a court.
44We turn now to this record. Does it demonstrate that an injustice would occur if issue estoppel were applied to the finding of the tribunal? We will first consider the record apart from the discharge of the appellant at his preliminary inquiry in April 1993 and without regard to the fresh evidence submitted on appeal by the respondent.
45The appellant's employment ended on July 11, 1991. He successfully applied to the Compensation Insurance Commission for unemployment insurance benefits. His employer (the Ministry of Education) appealed that determination to the Board of Referees (the Board). The appellant received notice of that appeal by letter dated January 30, 1992. The letter said in part:
You and/or your representative have the right to be present at hearing. If you have information you feel could affect the decision made on this claim or if you are unclear about how to proceed, please contact the person identified below within five days of receipt of this letter:
Clerk of the Board of Referees at 666-6327.
Please be advised that this hearing will proceed as scheduled, even if you or your representative do not wish to attend.
46The Board held a hearing on February 26, 1992. The appellant was present and a representative of the employer was present via the telephone. According to the Board's reasons, both parties submitted "extensive facts", including a report from Price Waterhouse. The Board allowed the appeal and recommended that the appellant be disqualified from receiving unemployment insurance benefits for a period of 12 weeks by virtue of his "misconduct". The Board relied on the Price Waterhouse report but did not specify the nature of the misconduct.
47By notice of appeal dated February 26, 1992, the appellant appealed the Board's findings to the Umpire. He alleged that the Board made errors in fact and law. The appellant did not contend, although he was entitled to do so under the operative statutory provisions, that the Board had failed to observe the appropriate standards of procedural fairness.
48By letter dated April 15, 1992, the appellant set out his complaints with respect to the decision of the Board. He raised several objections to the Price Waterhouse report including:
-- the allegations in the report were untrue.
-- the conclusions in the report were matters of interpretation and not findings of fact.
-- the documents relied on in the report did not substantiate the figures in the report and did not substantiate the conclusions in the report.
-- the Board was in no position to verify the allegation in the report.
49The appellant's letter indicates that as of April 1992, he was fully aware of the contents of the Price Waterhouse report and had access to the documents relied on by those who prepared the report. He was able to make very specific submissions as to the alleged failings of the report.
50By letter date stamped May 25, 1992, the appellant was advised of the following on behalf of the Umpire:
With reference to your appeal to the Umpire from the decision of the Board of Referees given at Vancouver, B.C. on 26 February 1992 in connection with your claim for benefit, I enclose a copy of the material which is being submitted to the Umpire.
You or your representatives, as well as any person or association having an immediate interest in the decision, may file a statement of observations or representations for consideration by the Umpire. Such statement of observations should be filed at the local office of the Commission where the appeal was filed within fifteen days of the date of this letter for transmission to the Umpire.
As an oral hearing has been requested you will be advised by the Registrar of the Umpire of the time and place of the hearing.
(Emphasis added)
51The appellant commenced this action in October 1993, while his appeal to the Umpire was pending.
52The hearing before the Umpire was initially scheduled for April 20, 1994. It was adjourned at the request of counsel for the appellant and rescheduled for September 13, 1994. The hearing before the Umpire (A. H. Hollingsworth, Q.C.) eventually took place on September 29, 1994. The appellant, who had been represented by counsel earlier when he obtained the adjournment in April, appeared without counsel before the Umpire. He made submissions and filed additional material before the Umpire. The employer was also represented.
53The appellant was advised of the Umpire's decision in January of 1995. The letter said:
The decision of the umpire on an appeal from a decision of a board of referee is final and, except for judicial review under the Federal Court Act, is not subject to appeal to or review by any court. On new facts, however, the umpire may rescind or amend his decision (s. 86 of the Act).
54The appellant took no steps to challenge the decision of the Umpire.
55The Umpire upheld the decision of the Board. He gave extensive reasons for doing so and made express findings. His reasons included the following:
I exercise my powers under Section 81 of the Act to give the decision the Board of Referees should have given. I make findings that the employer had justification under Section 20(1)(c) of Regulation 881 of the Public Service Act, Revised Statutes of Ontario, 1980, Chapter 418 to discharge the claimant for misconduct, the misconduct being that the claimant worked from the period of 1985 to 1990 for both the Ontario government and the German government and also that he received money for travelling expenses from both the Ontario government and the German government.
(Emphasis added)
56The appellant knew no later than February 1992 that the Ministry was alleging that he had worked full-time for another employer while employed by the Ministry and that he had cheated the Ministry by claiming expenses which he also claimed from the other employer. The appellant knew that if either allegation was substantiated his dismissal was justified. The appellant appeared before the Board and had a full opportunity to present his version of events. He made extensive submissions to the Board and put factual material before the Board.
57The appellant appealed the Board's finding setting out in some detail his reasons for challenging that finding. It is clear from his correspondence that he appreciated the contents of the Price Waterhouse report and was able to make specific submissions about the reliability of that report and the inappropriateness of relying on that report. The appellant received all of the material that had been forwarded to the Umpire in May of 1992. He had almost two and one-half years to prepare for the hearing before the Umpire. He had counsel for part of that time. Counsel did not appear before the Board or Umpire but there was nothing to suggest that counsel could not have appeared had the appellant elected to have counsel.
58When the appellant appeared before the Umpire he made submissions and placed additional material before the Umpire. There was nothing to prevent him from placing whatever additional material before the Umpire he thought was appropriate and necessary to support his position. He could have placed whatever material he thought appropriate before the Umpire to demonstrate that the Price Waterhouse report should not be relied on by the Umpire. It is also noteworthy that the appellant had commenced this action about a year prior to the hearing before the Umpire. It is fair to assume that preparation for this action would also have involved the preparation of an effective response to the Price Waterhouse report.
59The appellant knew exactly the case he had to meet before the Board and the Umpire, had every opportunity to present his case and, in fact, did so before both the Board and the Umpire. The absence of various procedural mechanisms (e.g., discovery, cross-examination of witnesses) in the summary procedure followed by the Board and the Referee have not been shown to have worked any injustice in this case.
60Nor can the appellant claim that the urgency of his circumstances or financial pressures precluded him from properly putting his case forward before the Board or the Umpire. He made no such claim in response to this motion, no doubt because almost two and one-half years passed between the initiation of his appeal to the Umpire and the hearing of the appeal. The appellant was represented by counsel for part of that time and had all of the pertinent information.
61In Minott v. O'Shanter Development Co., supra, Laskin J.A. also indicates that the expertise or lack thereof of a tribunal may be relevant in determining whether issue estoppel should be applied to findings made by that tribunal. That factor is neutral in this case. The findings of misconduct made by the Referee are not findings for which any special expertise was needed. It cannot be said that either the Referee or a court would be better suited to make those findings.
62One of the factors identified by Laskin J.A. in Minott v. O'Shanter Development Co., supra, at p. 342, does operate in favour of the appellant. The financial stakes involved in the proceedings before the Board and the Umpire were significantly less than those involved in the suit initiated by the appellant. That factor may support a refusal to apply the doctrine of issue estoppel. It is, however, the only factor operating in favour of the appellant. Standing alone it cannot justify a refusal to apply the doctrine. It will almost inevitably be the case that the stakes in civil proceedings are much higher. If that factor alone justified the refusal to apply the doctrine then one would be driven to the position that issue estoppel cannot be applied to findings of fact made by tribunals like the Board or the Umpire. The law in this province is to the contrary.
63Setting aside for the moment, the results of the preliminary inquiry and the fresh evidence tendered by the respondent, the appellant has not made out a case for the exercise of the discretion to refuse to apply issue estoppel.
Effect of the Discharge after the Preliminary Inquiry
64We turn next to the effect of the appellant's discharge at the preliminary inquiry. The appellant faced three charges at the preliminary inquiry. Counts one and two alleged that he defrauded the Ministry of Education by falsely representing that he was engaged in employment only with the Government of Ontario. Count three alleged that he defrauded the Government of Ontario by obtaining reimbursement for expenses from the Government of Ontario and from a German entity. He was discharged on count three when the Crown failed to adduce admissible evidence of expenses paid by the German entity. He was discharged on counts one and two when according to the preliminary inquiry judge the Crown failed to prove the elements of fraud or false pretences.
65The outcome of the preliminary inquiry has no relevance in the exercise of the discretion to refuse to apply the doctrine of issue estoppel. The discharge at the preliminary inquiry says no more than that the Crown had failed to put forward a prima facie case of criminal fraud. It does not, in our view, say anything about whether the appellant was in fact working for both the Ontario Government and a German entity at the same time. The discharge at the preliminary inquiry does not detract from the findings of fact made by the Umpire. The outcome of the preliminary inquiry should have no effect on the applicability of issue estoppel arising out of the findings made by the Board and the Umpire.
The Fresh Evidence Tendered by the Respondent
66As we would dismiss the appeal on the record, it is unnecessary for us to address the fresh evidence tendered by the respondent. We will, however, do so.
67The fresh evidence indicates that the German authorities charged the respondent with fraud arising out of his business dealings in Germany between 1986 and 1990. The frauds were alleged to have been perpetrated against various German agencies. In September 1996, after the motion was heard before Hoilett J., the appellant pleaded guilty in Germany to numerous fraud charges. The fresh evidence consists of a certified copy of the decision of the German court and a certified English translation of that decision.
68In its reasons for judgment and sentence the German court said:
On 20 September 1985, the accused was posted from Canada to Frankfurt as Head of the Ontario Office. He worked in this position until he was appointed Head of the new Ontario Office in Stuttgart in 1989. Simultaneously, the accused continued to work for the IFA after 20 September 1985, initially in his original function as Head of the North America Department and, from 1989 on, as Head of Working Group IV (Information and Public Relations) . . . .
69There is nothing in the fresh evidence to indicate whether the appellant admitted that he was working simultaneously for the Ontario Government and the German agency in the proceedings before the German court. Nor, if he did not make any such admission, is there any indication of the basis upon which the German court made that finding. Furthermore, the above-quoted passage from the reasons of the German court is found in Part I of the reasons in which the court set out background information as a prelude to its detailed consideration of the actual transactions giving rise to the fraud charges.
70If the fresh evidence demonstrated that the appellant had admitted working for both the Ontario Government and German agencies in the proceedings in the German court, or if the basis for the finding made by the German court was evident from the fresh evidence, or if the finding was central to the verdicts reached by the German court, then it would have told strongly against the appellant's contention that it would be unfair to apply the doctrine of issue estoppel against him. However, on the basis of this fresh evidence we cannot find that the appellant made any such admission or that his simultaneous employment by the Ontario Government and German entities was material to the proceedings before the German court. Absent anything beyond the reasons of the court, we would not be prepared to hold that the unexplained finding of the German court on a preliminary matter should be weighed against the appellant in determining whether the dictates of fairness required that the doctrine of issue estoppel not be applied against him.
Disposition
71We would dismiss the appeal with costs.
Appeal dismissed.
Notes
Note 1: Now the Employment Insurance Act, S.C. 1996, c. 23.
Note 2: The Price Waterhouse report was relied on by the Umpire and is stated to be an appendix to his decision although it was not so attached in the record before this court. It is our understanding that the report included with the appellant's cross-motion material is the same report referred to and relied on by the Umpire.
Note 3: Applications for leave to appeal dismissed (1994), 19 O.R. (3d) xvi.
Note 4: This test was overruled in the later decision in Fakhari v. Canada (Attorney General) (1996), 197 N.R. 300 (F.C.A.).
Note 5: United States of America v. Shephard, 1976 8 (SCC), [1977] 2 S.C.R. 1067, 70 D.L.R. (3d) 136.
Note 6: Rasanen, supra; Danyluk v. Ainsworth Technologies Inc. (1998), 1998 5431 (ON CA), 42 O.R. (3d) 235, 167 D.L.R. (4th) 385 (C.A.), leave to appeal to S.C.C. granted February 5, 1999; Heynen, supra.
Note 7: Minott, supra; Braithwaite v. Nova Scotia Public Service Long Term Disability Plan Trust Fund (1999), 1999 NSCA 77, 176 N.S.R. (2d) 173 (C.A.) at p. 188.
